Employment Agreement
Exhibit 10.4
This Employment Agreement (this “Agreement”) is entered into as of December
7, 2009 (the “Effective Date”) between Portrait Innovations, Inc., a Delaware corporation
(“Company”), and Xxxxxx Xxxxxxxxx, a resident of New Jersey (“Employee”).
ARTICLE I
POSITION
POSITION
Subject to the terms hereof, Company will employ Employee, and Employee will serve Company in
the capacity of Executive Vice President and Chief Technology Officer. Employee will report
directly to the Chief Executive Officer of the Company.
ARTICLE II
DUTIES
DUTIES
Employee will perform various duties consistent with his title as determined by the Chief
Executive Officer of Company, including, without limitation, managing all Company information and
technology business functions, hardware, software applications, systems and employees. Employee
acknowledges and agrees that he is employed solely by the Company and that he may be asked in the
course of his duties for the Company to perform services for the benefit of other Company Group
Members (as defined below).
ARTICLE III
SERVICE
SERVICE
Except during Vacation Days, Company holidays, any periods of illness and authorized leaves of
absence (each, an “Authorized Absence”), Employee will devote substantially all of his
working time and efforts to the business and affairs of the Company. Employee shall work at the
corporate headquarters of the Company no less than three business days of each week during
Employee’s employment with the Company (the “In-Office Days”), with Employee working from
his primary residence each of the remaining business days of such week (“At-Home Days”).
Employee shall, in good faith and taking into account his duties hereunder, choose which days of
each week during his employment will be In-Office Days.
ARTICLE IV
TERMS OF EMPLOYMENT
TERMS OF EMPLOYMENT
4.1. At-Will Employment. Company and Employee hereby agree that Employee’s employment
with the Company shall be at-will and that Employee’s employment with Company may be terminated at
any time, for any reason or for no reason, subject to the terms hereof. Nothing in this Agreement
shall be construed as a commitment, guarantee, agreement or understanding of any kind or nature
that Company will continue to employ Employee, nor will this Agreement affect in any way the right
of Company to terminate Employee’s employment at any time and for any reason (unless otherwise agreed to by the parties separately in writing).
Employee acknowledges and agrees that he is an “at-will” employee.
4.2. Term of Agreement. This Agreement shall be effective as of the Effective Date
and continue until the third anniversary of the Effective Date (the “Initial Term”) and
shall automatically renew for successive one-year terms (each, a “Renewal Term”), unless,
in each case, otherwise terminated as provided in Article VI of this Agreement. During any Renewal
Term, the terms, conditions and provisions set forth in this Agreement shall remain in effect
unless modified in accordance with Section 9.8.
ARTICLE V
COMPENSATION AND BENEFITS
COMPENSATION AND BENEFITS
5.1. Base Salary. Company agrees to pay Employee an annual salary of $162,750
(“Base Salary”). Employee’s Base Salary will be payable as earned in accordance with
Company’s customary payroll practice and shall be subject to customary withholding. Employee’s
Base Salary shall be reviewed for increase on an annual basis at the beginning of each fiscal year,
with the first such Base Salary increase review date being February 1, 2010 and therafter beginning
with the fiscal year starting date in each subsequent year in accordance with Company’s standard
employee review and compensation practices. Any Base Salary adjustment shall be consistent with
the percentage (%) increase adjustments for all Company Corporate Officers and/or Executives as a
group and in all cases, Base Salary increases shall be determined pursuant to such practices at the
sole and absolute discretion of the Company.
5.2. Additional Benefits. Employee will be eligible to participate in benefit plans
of general application to the employees of Company as they may be established and modified from
time to time, including the Company’s Health Reimbursement Arrangement, Group Life Insurance Plan
and 401(k) Plan (“Benefits”). In addition to the paid holidays of Company, Employee is
eligible for fifteen (15) days of paid vacation (each, a “Vacation Day”) during each fiscal
year of employment. Employee will be eligible for an additional Vacation Day for each full fiscal
year for which Employee remains employed by the Company provided however, that in
no event shall Employee be eligible for more than twenty (20) Vacation Days in any fiscal year.
Employee shall not carry over unused Vacation Days from one fiscal year to any subsequent fiscal
year, with any Vacation Day not used in the fiscal year in which it is earned being forfeited by
Employee.
5.3. Expenses. Except with respect to expenses described in Section 5.4, Company will
reimburse Employee for all reasonable and necessary expenses incurred by Employee in connection
with the business of Company (“Expenses”), provided that such expense reimbursements are in
accordance with the policies of the Company and are properly documented.
5.4. Weekly Travel Expenses. The Company shall, in connection with Employee’s
In-Office Days, pay for (i) one round trip coach airline ticket from New Jersey to Charlotte, North
Carolina. Employee shall, in good faith and taking into account his duties hereunder, choose an
early AM arrival flight to Charlotte from New Jersey and a late PM departure flight from Charlotte
back to New Jersey.(ii) two nights hotel accommodations (including breakfast) at the
Ayrsley Hilton Garden Inn, or other comparable hotel determined by Company and agreeable to
Employee; (iii) the Ayrsley Hilton Garden Inn airport shuttle service, or other comparable airport
transportation determined by Company; and (iv) a three (3) day car rental or Company car to be
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arranged by Company (collectively, the “Weekly Travel Expenses”). Employee shall use his
best efforts to notify the Company of the In-Office Days relating to each week no less than two
weeks in advance of such week.
5.5. Bonus. Employee shall be eligible to participate in Company’s Annual Corporate
Bonus Plan, and shall have the ability to earn an annual bonus of up to thirty percent (30%) of his
Base Salary (each, an “Annual Bonus”). Each Annual Bonus shall be based on (i) Company’s
achievement of annual, fiscal year performance goals and (ii) Employee’s achievement of annual,
fiscal year individual performance goals, in each case, to be established in advance by the Chief
Executive Officer in consultation with Employee in connection with Company’s annual budgetary
process. Employee will be entitled to an Annual Bonus, prorated for fiscal 2009, (less applicable
withholding taxes) in April of the year following the year to which such Annual Bonus relates.
5.6. Stock Options. No later than thirty (30) days after Employees employment start
date, Employee shall be issued options to purchase 40,000 shares of the common stock of Portrait
Innovations Holding Company, (prior to any potential FY 2009 stock split) a Delaware corporation
(“Holdings”), at an exercise price of $8.92 per share (the “Stock Options”), in
consideration for his services hereunder. The Stock Options will be issued pursuant to the stock
option plan of Holdings in effect at that time (the “Plan”), and shall at all times be
subject to the Plan, as it may be amended from time to time, and this Agreement. The Stock Options
will be subject to annual vesting at the rate of 20% per year.
ARTICLE VI
TERMINATION
TERMINATION
6.1. Events of Termination. Employee’s employment with Company shall terminate upon
any of the following:
(i) the effective date of a written notice by Company to Employee stating Company’s
determination to terminate Employee for Cause (as defined in Section 6.2) (“Termination for
Cause”);
(ii) the effective date of a written notice by Company to Employee stating Company’s
determination, made in good faith and based upon the advice of competent medical personnel
reasonably acceptable to Employee, that the Company is terminating Employee due to his Permanent
Disability (as defined in Section 6.3) (“Termination for Disability”);
(iii) Employee’s death (“Termination upon Death”);
(iv) the effective date of a notice to Employee stating that Company is terminating his
employment without Cause, which notice can be given by Company at any time after the Effective Date
at Company’s sole discretion, for any reason or for no reason (“Termination without
Cause”); or
(v) the effective date of a notice delivered by Employee to Company stating that Employee is
electing to terminate his employment with Company; provided that, such effective
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date shall be no earlier than one (1) month from the date Employee delivers such notice to Company
unless otherwise determined by Company (“Resignation”).
6.2. “Cause” Defined. For purposes of this Agreement, “Cause” shall mean:
(i) Employee’s conviction of, or plea of nolo contendere to, any crime constituting a
felony, or a misdemeanor which involves Employee’s fraud, theft, embezzlement, dishonest acts or
similar matters;
(ii) any refusal by Employee to perform his duties under this Agreement or to obey the lawful
directives of the individuals to whom Employee reports or the Company;
(iii) Employee’s negligence, willful misconduct (including fraud, embezzlement or
misappropriation), or willful malfeasance in connection with Employee’s services hereunder;
(iv) Employee’s violation of any written policy of any Company Group Member relating to equal
employment opportunity, discrimination, harassment or retaliation;
(v) Employee’s working under the influence of illegal drugs or alcohol, except, in the case of
alcohol, for industry-related social events and client development, or
(vi) Employee’s breach of any covenant, representation or warranty contained in this
Agreement.
6.3. “Permanent Disability” Defined. For purposes of this Agreement, “Permanent
Disability” shall mean Employee has been (or will be) unable to substantially render the
services to be provided by Employee to Company for a period of more than ninety (90) days in any
consecutive one-hundred eighty (180) day period with such accommodations as required by law
Employee shall cooperate with Company if a question arises in determining whether a Permanent
Disability exists (including, without limitation, submitting to an examination by a medical doctor
or other health care specialists selected by the Board and reasonably acceptable to Employee and
authorizing such medical doctor or such other health care specialist to discuss Employee’s
condition with the Board).
ARTICLE VII
EFFECT OF TERMINATION
EFFECT OF TERMINATION
7.1. Termination for Cause; Disability; Death; Resignation. In the event of any
termination of Employee’s employment pursuant to Section 6.1(i) (Termination for Cause), Section
6.1(ii) (Termination for Disability), Section 6.1(iii) (Termination upon Death) or Section 6.1(v)
(Resignation):
(i) Company shall pay to Employee the Base Salary, Expenses and Weekly Travel Expenses
otherwise payable to Employee under Sections 5.1, 5.3 and 5.4 through the effective date of
termination;
(ii) Employee’s rights under Company’s benefit plans of general application shall be
determined under the provisions of those plans; and
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(iii) Employee shall forfeit the right to receive any Annual Bonus, regardless of the period
to which such Annual Bonus relates; provided, however, that in the event of a
termination pursuant to Section 6.1(ii) (Termination for Disability) or Section 6.1(iii)
(Termination upon Death), Employee shall remain entitled to any Annual Bonus earned for the
calendar year prior to the year of termination but which remains unpaid as of the date of
termination.
7.2. Termination without Cause. In the event of termination of employment pursuant to
Section 6.1(iv) (Termination without Cause):
(i) Company shall pay to Employee the Base Salary, Expenses and Weekly Travel Expenses
otherwise payable to Employee under Sections 5.1, 5.3 and 5.4 through the effective date of
termination;
(ii) Company shall pay to Employee severance pay, subject to all authorized or legally
required withholdings, in an amount equal to 50% of one (1) year’s annual Base Salary. Such
payments shall begin at the regularly scheduled payroll date next following the effective date of
any release agreement executed as provided for herein, and shall be made, in accordance with
Company’s normal payroll policies and practices, at the regularly scheduled payroll dates until the
total amount of such severance pay has been paid in full;
(iii) Employee’s rights under Company’s benefit plans of general application shall be
determined under the provisions of those plans; and
(iv) Company shall pay to Employee an Annual Bonus for the year of termination through the
date of termination on a prorated basis based upon performance for the year of termination relative
to the previously approved goals determined in accordance with Section 5.5. The extent to which
the agreed upon goals have been achieved and the method of proration shall be determined by Company
in good faith. Notwithstanding the foregoing, Employee shall not be entitled to a prorated Annual
Bonus for any calendar year if the effective date of his termination is on or prior to July 31 of
such year. Employee shall remain entitled to any Annual Bonus earned for the calendar year prior
to the year of termination but which remains unpaid as of the date of termination.
Notwithstanding anything in this Section 7.2 to the contrary, Employee may be required to sign
a general release of the Company Group, at the discretion of Company and with the form of such
release to be reasonably acceptable to Company, and failure of Employee to execute and deliver such
release to Company within ten (10) business days of the effective date of such Termination without
Cause shall result in the forfeiture of (A) Employee’s right to receive any severance pay pursuant
to Section 7.2(ii), (B) Employee’s right to receive any Annual Bonus pursuant to 7.2(iv) and (C)
any Stock Options of Employee, whether vested or unvested.
ARTICLE VIII
CONFIDENTIALITY
CONFIDENTIALITY
8.1. Restrictive Covenants.
8.1.1. Employee acknowledges that the Company Group at considerable expense has purchased and
developed valuable goodwill, going concern value, customer and client
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relationships and
confidential information that are valuable property rights of the Company Group and that Employee’s
position with Company is such that Employee will have access to and knowledge concerning such
rights, which if used other than for the benefit of the Company Group, would significantly injure
Company and the Company Group. Accordingly, and in consideration of the mutual promises contained
herein and in order to protect the goodwill and going concern value of Company, Employee covenants
for the benefit of Company, Holdings and their affiliates (collectively, the “Company
Group” and each a “Company Group Member”), that, during the period commencing on the
Effective Date and terminating on the second anniversary of the effective date of his termination
pursuant to Section 6.1 (the “Restrictive Period”), he shall not, directly, indirectly or
beneficially, in his individual capacity or as a partner, member, employee, agent, officer,
director, investor, consultant, independent contractor, joint venture or stockholder (except (i) as
a holder of not more than one percent (1%) of any class of the outstanding stock of any company
listed on a national securities exchange, or actively traded in a national over-the-counter market
so long as Employee does not actively participate in the management or business of such entities or
(ii) as a direct or indirect holder of an equity interest in Company or Holdings) of any other
individual, partnership, corporation, limited liability company, trust or any other entity
(collectively “Person”), or in any other capacity, other than at the direction of, and on
behalf of, Company, Compete (as defined below) with any Company Group Member or any of their
respective successors or assigns. For purposes of this Agreement, “Compete” shall mean:
(i) own, manage, operate, join, control, or participate in the ownership, management, operation or
control of, or permit the use of his name by, or work for, or provide consulting, financial or
other assistance to, or be connected in any manner with, a business or business activities
identical or substantially similar to the Business or any other business engaged in by any Company
Group Member during the one (1) year period preceding the effective date of Employee’s termination
of employment (a “Competitive Business”) within the United States of America (the
“Territory”); or (ii) to assist any Person (whether in a financial, managerial, employment,
advisory or other capacity or as a stockholder or owner, or by the provision of information) to
engage in a Competitive Business within the Territory. Notwithstanding any provisions to the
contrary contained in this Agreement, the Restrictive Period shall be extended for the period of
time Employee violated, breached or threatened breach of any of the respective covenants and
agreements contained in Article VIII of this Agreement. Employee and Company agree that the
definition of Compete and Competitive Business, the geographic scope of the Territory and the
duration of the Restrictive Period are reasonable. For purposes of this Agreement, the “Business”
shall mean the business of the business of designing, developing, operating and marketing digital
imaging photographic technologies and applications, focusing on: (i) the operation of digital
imaging portrait studios in freestanding locations and within retail chain store locations; and
(ii) the development, design and useful application of digital imaging components, processes,
software and source code (relating primarily to photographic, printing and sales systems) for use
in digital imaging portrait studios and the provision of professional portraiture services.
8.1.2. Employee covenants that, during the Restrictive Period, Employee will not knowingly,
directly or indirectly:
(i) employ or retain as an independent contractor, employee or consultant any Person who was
employed or retained by any Company Group Member or any of their respective
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successors or assigns
during the three (3) year period ending on the effective date of Employee’s termination, or
(ii) solicit or encourage any such Person to terminate such Person’s employment or retention
by any Company Group Member or any of their respective successors or assigns, including, without
limitation, in connection with becoming employed or retained by Employee or any other Person to
perform the same or similar services related to the activities that such Person performed for the
Company Group.
8.1.3. Employee covenants that, during the Restrictive Period, Employee will not, directly or
indirectly:
(i) solicit, contact or deal with any Person that was a customer or client of Company or any
Company Group Member or their respective successors or assigns during the three (3) year period
ending on the effective date of Employee’s termination for the direct or indirect purpose of
providing services or products to such customer or client, which services or products are
competitive with or similar to one or more services or products provided by Company or any Company
Group Member; or
(ii) solicit, contact or deal with or attempt to solicit, contact or deal with any prospective
customer or client of Company or any Company Group Member or any of their respective successors or
assigns for the direct or indirect purpose of providing services or products to such prospective
customer or client, which services or products are competitive with one or more services or
products provided by any Company Group Member. For this purpose, a prospective customer or client
is any Person that any Company Group Member has taken concrete steps to solicit during the three
(3) year period ending on the effective date of Employee’s termination and who is known, or
reasonably should have been known, by Employee to have been contacted for such purpose.
8.1.4. Employee covenants that he will not, directly or indirectly, make or publish, verbally
or in writing, any statements concerning the Company Group and/or its employees or representatives
which statements are or reasonably may be construed as being injurious or inimical to the best
interests of the Company Group, including, but not limited to, statements alleging that the Company
Group and/or its employees or representatives have acted improperly, illegally or unethically or
have engaged in business practices which are improper, illegal or unethical, except pursuant to a
subpoena or order issued by a court of competent jurisdiction (provided that Employee shall (a)
immediately give Company notice of the circumstances surrounding such compelled disclosure in order
to provide Company an opportunity to seek an appropriate protective order with respect thereto, and
(b) in no event make disclosure before the expiration of the compliance date set forth in the
subpoena or other request for production)
8.1.5. Employee acknowledges that his employment with Company creates a relationship of
confidence and trust with respect to any information of a confidential or secret nature that
relates to the business of the Company Group or any other party with whom such entities agree to
hold information of such party in confidence (“Confidential Information”). Such
Confidential Information includes, but is not limited to, confidential techniques, know-how,
financial information, copyrights, patents, trademarks, trade names, slogans, logos, designs,
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service marks, computer software programs, databases, magnetic media, systems, source code and
programs, trade secrets, business lists, customer lists, client lists, supplier lists, employee
personnel files, engineering data, logs, consultants’ reports, budgets, ratings, forecasts, format
strategy, financial reports and projections, tapes and electronic data processing files, accounting
journals and ledgers, accounts receivable records and sales, operating, marketing and business
plans. Employee stipulates and agrees that such Confidential Information is the sole and exclusive
property of Company (or the respective Company Group Member, or such customers, clients, or
vendors, as the case may be), that such Confidential Information is confidential and proprietary,
and that the unauthorized use or disclosure of such Confidential Information would seriously and
irreparably damage the business of any Company Group Member. At all times during the Restrictive
Period and thereafter, Employee will keep and hold all such Confidential Information in strict
confidence and trust, and will not in any fashion, form or manner, either directly or indirectly,
use, disclose, divulge or communicate to any Person any of such Confidential Information, except
pursuant to a subpoena or order issued by a court of competent jurisdiction (provided that Employee
shall (a) immediately give Company notice of the circumstances surrounding such compelled
disclosure in order to provide Company an opportunity to seek an appropriate protective order with
respect thereto, and (b) in no event make disclosure before the expiration of the compliance date
set forth in the subpoena or other request for production). Confidential Information shall not
include any information or material (A) to the extent that such information or material is filed
with any governmental agency on a non-confidential basis or (B) is or becomes generally available
to the public other than as a result of a wrongful disclosure by (x) a person otherwise bound to
the provisions hereof, or (y) any person bound by a duty of confidentiality or similar duty owed to
the Company Group. Upon the termination of Employee’s employment with Company, he will promptly
deliver to Company all documents and materials of any nature pertaining to the Company Group or its
respective businesses and will not take with his any documents or materials or copies thereof
containing any Confidential Information.
8.2. Enforcement; Remedies. Employee covenants, agrees and recognizes that because
the breach or threatened breach of the covenants, or any of them, contained in Article VIII hereof
will result in immediate and irreparable injury to the Company Group, Company (and any Company
Group Member) shall be entitled to an injunction restraining Employee from any violation of and
covenants and agreements contained in Article VIII hereof to the fullest extent allowed by law.
Employee further acknowledges, covenants and agrees that his compliance with the provisions of
Article VIII of this Agreement are conditions precedent to his right to receive any severance pay
from Company and that, if he breaches any such provisions, he shall not, notwithstanding any
provision in the Agreement to the contrary, be entitled to receive any severance pay from Company
under this Agreement that has not already been paid to him and that he shall have to return
immediately any and all severance pay previously paid to him by Company pursuant to this Agreement.
Employee further covenants and agrees that (i) in the event of a breach or violation of any of the
respective covenants and agreements contained in Article VIII hereof, Company (or any Company Group
Member) shall be entitled to receive all such amounts to which they would be entitled as damages
under law or at equity, and (ii) in the event of a threatened breach of any of the respective
covenants and agreements contained in Article VIII hereof, Company (and each Company Group Member)
shall be excused from
making any further payments or distributions to Employee pursuant to any provision of this
Agreement (and any other agreement involving any Company Group Member) or with respect to
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the common stock issued to Employee upon exercise the Stock Options until Employee shall cease
threatening breach of his respective covenants and agreements contained in Article VIII hereof and
Company shall have received reasonable assurances from Employee that he will not breach same, at
which time the previously suspended payments or distributions shall, except to the extent provided
herein, be made to Employee, which amounts shall be reduced by the damages suffered by the Company
Group. Nothing herein shall be construed as prohibiting a Company Group Member from pursuing any
other legal or equitable remedies that may be available to it for any such breach, including the
recovery of damages from Employee. If any Company Group Member files suit to enforce, enjoin the
enforcement, interpret or determine the scope of the covenants contained herein, the prevailing
party in such suit shall be entitled to recover, in addition to all other damages or remedies
provided for herein, its costs incurred in prosecuting or defending said suit, including reasonable
attorneys’ fees.
8.3. Construction. Employee hereby expressly acknowledges and agrees as follows:
(i) the covenants set forth in Article VIII are reasonable in all respects and are necessary
to protect the legitimate business and competitive interests of the Company Group in connection
with its business which Employee agrees, pursuant to this Agreement, to assist in maintaining and
developing; and
(ii) each of the covenants set forth in Article VIII is separately and independently given,
and each such covenant is intended to be enforceable separately and independently of the other such
covenants, including without limitation, enforcement by injunction, and that the invalidity or
unenforceability of any provision of this Agreement in any respect shall not affect the validity or
enforceability of this Agreement in any other respect.
In the event that any provision of this Agreement shall be held invalid or unenforceable by a
court of competent jurisdiction by reason of the geographic or business scope or the duration
thereof of any such covenant, or for any other reason, such invalidity or unenforceability shall
attach only to the particular aspect of such provision found invalid or unenforceable as applied
and shall not affect or render invalid or unenforceable any other provision. This Agreement shall
be construed as if the geographic or business scope or the duration of such provision or other
basis on which such provisions has been challenged had been more narrowly drafted so as not to be
invalid or unenforceable.
ARTICLE IX
MISCELLANEOUS
MISCELLANEOUS
9.1. Arbitration. Employee and Company shall submit to mandatory binding arbitration
in any controversy or claim arising out of, or relating to, this Agreement or any breach hereof.
Such arbitration shall be conducted in Charlotte, North Carolina in accordance with the employment
rules of the American Arbitration Association in effect at the time such arbitration is conducted,
and judgment upon the determination or award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The arbitrator is hereby authorized to award to
the prevailing party the costs (including reasonable attorneys’ fees and expenses) of any such
arbitration.
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9.2. Absence of Conflicting Agreements and Obligations. Employee represents and
warrants that he is not a party to or bound by any other agreement or understanding of any type,
whether written or oral, or by any statutory or common law duty or obligation which, in any case,
would in any way restrict his ability to be employed by Company, or his ability to compete freely
with any other Person.
9.3. Severability. If any provision of this Agreement shall be found by any
arbitrator or court of competent jurisdiction to be invalid or unenforceable, then the parties
hereby waive such provision to the extent that it is found to be invalid or unenforceable and to
the extent that to do so would not deprive one of the parties of the substantial benefit of its
bargain. Such provision shall, to the extent allowable by law and the preceding sentence, be
modified by such arbitrator or court so that it becomes enforceable and, as modified, shall be
enforced as any other provision hereof, all the other provisions continuing in full force and
effect.
9.4. No Waiver. The failure by either party at any time to require performance or
compliance by the other of any of its obligations or agreements shall in no way affect the right to
require such performance or compliance at any time thereafter. The waiver by either party of a
breach of any provision hereof shall not be taken or held to be a waiver of any preceding or
succeeding breach of such provision or as a waiver of the provision itself. No waiver of any kind
shall be effective or binding, unless it is in writing and is signed by the party against whom such
waiver is sought to be enforced.
9.5. Assignment. This Agreement and all rights hereunder are personal to Employee and
may not be transferred or assigned by Employee at any time. Company may assign its rights,
together with its obligations hereunder, to any parent, subsidiary, affiliate or successor, or in
connection with any sale, transfer or other disposition of all or substantially all of its business
and assets.
9.6. Indemnification and Reimbursement of Payments on Behalf of Employee. Company
shall be entitled to deduct or withhold from any amounts owing, payable or distributable to
Employee from Company any federal, state, local or foreign withholding taxes, excise taxes, or
employment taxes (“Taxes”) imposed with respect to Employee’s compensation, payments or
distributions from Company or Holdings, including, without limitation, wages, bonuses, and
distributions. At the discretion of the Board, the amount required to be withheld may be withheld
in cash or property from such remuneration or distributions, as the case may be. Employee further
agrees that, in the event Company does not make such deductions or withholdings on Employee’s
behalf, Employee shall indemnify Company for any amounts paid with respect to any such Taxes,
together with any interest, penalties and related expenses thereto.
9.7. Entire Agreement. This Agreement constitutes the entire agreement between the
parties relating to the employment of Employee with Company, and this Agreement supersedes and
cancels any and all previous contracts, arrangements or understandings with respect thereto.
9.8. Amendment. This Agreement may be amended, modified, superseded, canceled,
renewed or extended only by an agreement in writing executed by both parties hereto.
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9.9. Notices. All notices and other communications required or permitted under this
Agreement shall be in writing and hand delivered, sent by registered first class mail, postage
prepaid return receipt requested, or sent by nationally recognized express courier service. Such
notices and other communications shall be effective upon receipt, to the following addresses, or
such other addresses as any party shall notify the other parties:
If to Company:
Portrait Innovations, Inc.
0000 Xxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxx, Chief Executive Officer
0000 Xxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxx, Chief Executive Officer
with copies to (which copies shall not constitute notice):
Xxxxxx & Bird LLP
Bank of America Plaza
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxx X. Rimier, Esq.
Bank of America Plaza
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxx X. Rimier, Esq.
If to Employee:
Xxxxxx Xxxxxxxxx
0 Xxxxxx Xxxxx
Xxxxxx Xxxxxxxx, XX 00000
0 Xxxxxx Xxxxx
Xxxxxx Xxxxxxxx, XX 00000
9.10. Employee’s Cooperation; Release. Employee shall cooperate with the Company
Group in any disputes with third parties, internal investigation or administrative, regulatory or
judicial proceeding as reasonably requested by any Company Group Member (including, without
limitation, Employee being available to any Company Group Member upon reasonable notice for
interviews and factual investigations, appearing at any Company Group Member’s request to give
testimony without requiring service of a subpoena or other legal process, volunteering to the
Company Group all pertinent information and turning over to the Company Group all relevant
documents which are or may come into Employee’s possession, all at times and on schedules that are
reasonably consistent with Employee’s other permitted activities and commitments). The Company
Group shall reimburse Employee for reasonable travel expenses (including lodging and meals, upon
submission of receipts) in connection with his compliance with this Section 9.10.
9.11. Binding Nature. This Agreement shall be binding upon, and inure to the benefit
of, the successors and personal representatives of the respective parties hereto.
9.12. Headings. The headings contained in this Agreement are for reference purposes
only and shall in no way affect the meaning or interpretation of this Agreement.
9.13. Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original but all of which, taken together, constitute one and the
same agreement.
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9.14. Governing Law. This Agreement and the rights and obligations of the parties
hereto shall be governed by and construed in accordance with the laws of the State of North
Carolina, without giving effect to the principles of conflict of laws.
9.15. Construction of Terms. In this Agreement, the singular includes the plural, the
plural includes the singular, and the masculine gender includes both male and female references.
Signatures Appear on the Following Page
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In Witness Whereof, the parties hereto have caused this Agreement to be executed as
of the Effective Date.
| Portrait Innovations, Inc. |
||||
| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | Chief Executive Officer and President | |||
| Date: | November 5, 2009 | |||
| /s/ Xxxxxx Xxxxxxxxx | ||||
| Xxxxxx Xxxxxxxxx | ||||
| Date: 12/1/09 | ||||
